Transcription
What is a Marshall Sparkman here? What did you do?
Another quick video today and talk about tax returns and how to utilize your tax returns to be able to help you get into a better position to buy a house. So we got tax returns, you're coming in and everybody's getting excited for our taxes. If you're looking to buy a house this year or even next year, you're wanting to get in a better position. These tips are going to help you. Okay, do not go blowing your money. Don't spend it. Hold that vacation. Let's get you into a house first.
Are you sort of some quick tips? Tip number one, obviously the most important is a down payment. So can you use your tax returns for a down payment? Absolutely. Are there down payment assistance programs out there available? Absolutely. There's about five or six here at Middle Tennessee that can help you out. So you don't necessarily need a down payment, but it brings me to step two.
Number two, tip is you can save your money in the bank. It's really good to have money in the bank because if you have any kind of funky scenario going on, like you're behind that income ratio or you have lower credit scores, having money in the bank or show and demonstrating that you have the ability to save money really means a lot. So me as a lender, I'm looking at it like, okay, they got money in the bank, so they're gonna be able to withstand life if it comes their way. So also keep in mind, if you're looking, if you're paying currently paying $1,200 a month and you're looking to go up to a $1,500 a month mortgage payment, if you don't have any money in the bank, it's telling me you're living check to check. So how are we gonna go from 1200 to 1500? Just food for thought. So demonstrate that you have the ability to save money. It's really going to go a long way.
So down payment, saved money. What about paying off debts to qualify? So maybe you only qualify for a $250,000 house, but you really need the three to be in the $300,000 price range. Well, maybe you could pay off some of your debts and I can get you qualified for there or to make more sense because it's just going to be more comfortable for you to live and have a mortgage without all that debt burden on your shoulders. So before you do anything, we need to have a, we need to have a mortgage consult first to make sure that paying off debts. Don't go try to do it yourself debt repair. Okay, it's kind of like you get a cut on your arm. Sure, you could probably stitch it up yourself, but you're better off going to a doctor so it doesn't get infected. Come to the financial doctor if you're looking to buy a house before you try to do it on your own. It's big-time no-no. Do-it-yourself credit repair, I'm not a fan. Do-it-yourself debt mitigation, not a fan.
Anyways, back on topic. What a number tip number four? What about increasing your credit score? What if your current credit score's is 600? I have seen people paying down credit cards and increase their credit score at 80 to 100 points within a matter of weeks. So your credit score, 35% of your credit score is a reflection of how you utilize your revolving credit cards. So if you have credit cards and you're over 50% of your credit limit, guess what? It's going to negatively impact your credit score. So equally as important as paying your bills on time is keeping a low balance on your credit cards. So if you're getting a tax return, I may advise you to pay down your credit cards to increase your credit score. So increasing your credit score could put you in a different loan product. It could make other loan products available for you. It could make it a lower down payment requirement there. It could help you with a down payment assistance program or a grant or something like that. It can lower your closing costs. There's all kinds of things a better credit score can do to help. So here to help you with that.
Also, I also keep in mind tip number five or six, whenever we're on closing costs. So you have your down payment for a house, then you have closing costs on top of that. Middle Tennessee average house is about $270,000 right now. Closing costs under $270,000 house is going to be about $8,000 ish, give or take a little bit depending on multiple variables. But if you're going and asking the sellers to pay your closing costs, sure, it's common in the market that sellers will help with some closing costs. But think about it. If you're going to look at a house, it's going to be competitive. Let's say it just hit the market, they've got five or six people already want to look at that house. The sellers are probably not going to be willing to negotiate anything at all with you because they want to get top dollar for their house, just as you look when you go to sell your house, right? So but if it's a house that's been sitting on the market for a couple of months and it's out in the middle and no one's looking, sure, the sellers are probably going to be a little bit more motivated to negotiate and help you pay closing costs. But if you're anywhere in Middle Tennessee, you know it's a competitive market. So you need to go in with a, with a clean, crisp offer that your sellers are going to be like, we want to work with this guy. He is financially stable and sound. He's not asking us to pay a whole bunch of closing costs, etc. So I may tell you, save your money and pay your closing costs. I may tell you to pay off debts. I may tell you to pay down debts. I may tell you to save it for a down payment. It's all going to depend on your scenario, which, you know, I really won't know until we look at the big picture.
Another thing to consider, tip number seven here, I think is moving expenses. Costs money to move. And if you're going from an apartment or a condo into a house, guess where you need a lot more? You need a weed eater. Are you going to need blinds and curtains and you're going to want to paint? Or you're going to have to buy your friends beer and pizza to help you move? You got the paper or U-Haul truck. There's all kinds of other expenses that that are going to take place when you're moving. So we just want to make sure that you're in the best position possible.
So please, I urge you, if you're looking to buy a house this year, give me a call. Let's walk through what's going to be best for you. It's going to put you in the best position. And don't go go to it a whole debt vacation for another semester, maybe I don't know. But anyways, if I can be of any assistance, I'm here for you guys. Thanks.